The Loan Note Agreement serves as a crucial financing instrument in South African corporate transactions, providing a structured mechanism for raising debt capital through the issuance of notes. This document is typically used when companies seek alternative funding sources to traditional bank loans, offering flexibility in terms of structuring and potentially wider distribution among investors. The agreement must comply with South African legislation, including the National Credit Act, Companies Act, and relevant financial regulations. It contains detailed provisions covering the issuance process, interest calculations, repayment terms, security arrangements (if any), events of default, and transfer restrictions. The document is particularly relevant for medium to large-scale corporate financing, project finance, or refinancing transactions, and can be adapted to accommodate both secured and unsecured lending structures within the South African legal framework.

1. Parties: Identification of the Issuer/Borrower, Initial Noteholder/Lender, and any other parties such as Security Trustee or Paying Agent

2. Background: Context of the loan note issuance, purpose of the funding, and structure of the transaction

3. Definitions and Interpretation: Definitions of terms used throughout the agreement and interpretation rules

4. Issue and Status of Notes: Terms of issue, nominal value, and status of the loan notes

5. Subscription: Details of subscription process, payment for notes, and closing mechanics

6. Interest: Interest rate, calculation methods, payment dates, and default interest provisions

7. Repayment and Redemption: Terms for repayment, early redemption rights, mandatory prepayment events

8. Payment Mechanics: Payment procedures, currency, business day conventions, and payment calculations

9. Tax Gross-up and Indemnities: Tax treatment, gross-up obligations, and related indemnities

10. Representations and Warranties: Standard representations and warranties from the Issuer

11. Information Undertakings: Financial and other information to be provided to Noteholders

12. General Undertakings: Positive and negative covenants of the Issuer

13. Events of Default: Circumstances constituting default and consequences

14. Changes to Parties: Transfer and assignment provisions for the notes

15. Administration: Administrative provisions, notices, calculations

16. Governing Law and Jurisdiction: Choice of South African law and jurisdiction provisions